The government recently issued a statement outlining the next steps in apprenticeship reform in response to a consultation from March last year “The future of apprenticeships in England: funding reform technical consultation”.
The two proposed payment models in the consultation were either PAYE or Apprenticeship Credits.
During the consultation small businesses raised concerns that these proposed new funding mechanisms could have an adverse impact on employer engagement with apprenticeships. The main concern is about a perceived increase in administrative and financial burden, potential adverse impact on cash flow and a lack of capability to negotiate with training providers. SMEs in particular were keen to ensure that intermediary organisations and training providers should provide administrative support to SMEs in implementing funding reforms and understanding eligibility for funding. Providers were concerned about ensuring that an employer led apprenticeship system should maintain the same standards of quality assurance and audit that the training providers are currently required to uphold.
Respondents suggested that the government needed to pilot the proposed model and mechanism and further raise awareness among employers about the reforms. Indeed the funding reforms will continue to be developed alongside the “trail blazer” programme- giving employers control over the
design of apprenticeships. Over 1000 employers of all sizes are now part of the trail blazers scheme in industries including engineering, legal services and health and social care.
Ruth Exelby Skills Director at Exemplas believes that “any activity which helps to improve business buy in to apprenticeships will open up much needed opportunities for young people. It will give businesses the incentive to work more closely with providers and give them more influence to improve quality and relevance of apprenticeships.” The government has said that it is committed to delivering a simple and effective funding process which works for employers of all sizes and further collaboration with the sector will help to ensure this is achieved. Neil Carberry, CBI director for employment and skills welcomed the announcement calling it a “positive step”. He said that “a world class apprenticeship system is critical to the future prosperity of the UK”.